Eolas Technologies has filed a motion to permanently enjoin Microsoft's distribution of its Internet Explorer browser amid a flurry of court filings by both sides in the pivotal patent infringement case.

Eolas, the sole licensee and sublicensor of a browser plug-in patent owned by the University of California, on Monday asked the U.S. District Court in Chicago for an injunction against distributing copies of IE capable of running plug-in applications in a way the Eolas patent covers.

"If they're not going to pony up and take a license under the patent, then they shouldn't be using it," Martin Lueck of Robins, Kaplan, Miller & Ciresi said in an interview.

Bottom line:
Should the court grant the injunction, and find that Microsoft's proposed IE work-around does not circumvent the patent, the software giant may find itself forced to pay Eolas to provide fundamental plug-in capabilities in the browser.

The Eolas patent infringement victory has rattled the Web since it was handed down in August. In its verdict, a jury found that Microsoft's IE browser infringed on an Eolas patent that describes how a browser opens external applications of the type Macromedia, Adobe Systems, RealNetworks, Apple Computer, Sun Microsystems and many other software providers produce.

Microsoft and the plug-in vendors aren't the only ones who are losing sleep over Eolas.

Web developers face the possibility of having to significantly rewrite their pages or strip them of commonly used technologies like Macromedia's Flash. And other browser makers, including Opera Software and two open-source development projects relied upon by companies like Hewlett-Packard and Apple, also face an uncertain future in terms of their plug-in technologies.

Lueck said Eolas would still permit Microsoft to distribute IE as is, as long as it's being used in conjunction with an application provider or a corporate intranet that has an Eolas plug-in license.

So far, Eolas has not granted any such licenses.

Lueck also noted that, should the motion be granted, Microsoft still could distribute IE with the plug-in capability disabled.

Microsoft said it is well on its way to side-stepping both the patent and a potential injunction with an IE alteration it previewed Monday--a version it expects to introduce early next year.

The previewed alteration would change the way IE renders pages that use ActiveX Controls to launch plug-ins. Microsoft also recommended to developers some methods of invoking external applications in a way it claims would circumvent the patented plug-in method.

Lueck and Eolas founder Mike Doyle said they were in the process of examining the IE preview and would not comment on its merits.

Microsoft's appeal
Microsoft on Monday filed motions to set aside the $521 million judgment and to grant it a new trial.

"As our court papers outlined (Monday), we believe we have substantial grounds for reconsideration by the judge," said Michael Wallent, a general manager in Microsoft's Windows division.

The Redmond, Wash., software giant asked for the new trial, citing several factors, including the unusual proportions of the jury's judgment and the court's refusal to allow discussion of some prior art or similar technology that Microsoft believes predated the Eolas patent and should therefore invalidate it.

Microsoft mentioned one piece of prior art in particular, the Viola browser, invented by Perry Pei-Yuan Wei, an artist, software engineer and then a student at the University of California at Berkeley. That browser dates back to 1991 and its plug-in capabilities to 1992, nearly two years before Eolas filed for its patent.

The motions Microsoft filed Monday are prerequisites for appealing the case to the U.S. Court of Appeals, which the company has pledged to do.

Microsoft also said it was preparing to challenge Eolas' demands for the court to update the damages award to include the period of September 2001 to the present. That could raise the amount of the award by hundreds of millions of dollars, though both sides declined to give a more exact calculation.

The $521 million award was calculated based on units Microsoft distributed between October 1998 and September 2001. Eolas has also calculated that Microsoft owes it about $111 million in interest on that award.

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Even as both sides escalated the post-trial battle with the Monday filings and Microsoft's IE preview, Lueck called changes to IE unnecessary and reiterated that Eolas was willing to offer Microsoft a paid-up license in exchange for the standing jury verdict plus interest.

"Eolas and the university are willing to resolve the case on a very reasonable basis," he said. "In view of the amount of the verdict and the accrued prejudgment interest, we'd be willing to give them a paid-up license, if they were willing to take out a license."

Lueck warned that the offer was not indefinite.

"That might change in the future, if they continue to refuse the deal," he said. "The quid pro quo would be settle it now--not force us to litigate for two, three, four years or whatever it is that they have in mind."

Microsoft contested Lueck's characterization of the offer as "reasonable" and said the company preferred to pursue its workaround strategy than sign a deal.

"In addition, the changes we rolled out for IE are modest and will not have significant impact on consumers or the Web community as a whole," Microsoft's Wallent said. "Based on that, the idea that we would pay more than $630 million to get rid of a single mouse click on a small fraction of Web pages is not something that we're entertaining."

Wallent based the "more than $630 million" figure on the $521 million verdict and a $111 million interest claim by Eolas.